Legendary investor Ray Dalio is still unimpressed with Bitcoin but he says there might be a ‘viable coin’ on the horizon: ‘Money as we know it is in jeopardy’ Ray Dalio, founder of Bridgewater Associates, at the Bloomberg New Economy Forum in Beijing, Nov. 21, 2019. Cryptocurrencies had a very dramatic year in 2022.
According to Ray Dalio, Bitcoin is useless and has no connection to anything.
Cryptocurrency offers a substitute for CBDCs and makes new sorts of commerce and transaction possible.
Ray Dalio, a well-known hedge fund manager and investor, created a stir this week with his remarks on cryptocurrencies. He expressed some encouraging remarks in an interview with CNBC, stating that Bitcoin and cryptocurrency had made “He began by calling Bitcoin “pretty remarkable,” but ended by seeming doubtful when he claimed that it “has no reference to anything… it moves and has no relevance. It’s a small thing, yet it attracts a lot of attention.”
The wealthy founder of Bridgewater Associates continued: “It won’t be a productive investment. It is not a reliable place to keep money. It is not a reliable means of exchange.”
It is important to note that Dalio is not supporting the status quo with his argument. He has really drawn notice for his ideas on the cyclical nature of history and empire, as well as his conviction that the world is currently undergoing the kind of profound power transitions that occur roughly every couple of centuries, both inside and outside the financial industry.
As a result, he poses broad queries and offers potential answers: “Right now, the status of money as we know it is under question. There is too much money being printed, and it’s not just in the US; it’s in all the reserve currencies. The question then becomes: What is money in that world, and how will it function? Therefore, I believe you’ll see the digital renminbi grow more and more common when we examine something like China’s renminbi. The main challenge, in my opinion, will be what money is over the coming years—not just as a means of transaction, but also as a repository of wealth.”
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Dalio added the following: “An inflation-linked coin is what would be most beneficial. Or, to put it another way, something that would allow you to essentially say, “Okay, this will give me purchasing power because every individual wants, what do they want?” If you want to save, they want to protect their purchasing power.”
Since the most popular cryptocurrency is hailed by its supporters as fixing exactly the problems that Dalio points out, it is not surprise that these views sparked strong opposition from Bitcoin supporters. In other words, Bitcoin is positioned as a universal solution in a changing, unsteady world where people are sceptics about the validity of money itself, where maintaining wealth and purchasing power are real issues, and where digital transactions are quickly taking over.
Further, Bitcoin presents a radical new framework for money and transactional capability—that of decentralisation and dissociation from the state—and has a first-mover advantage. It also functions globally and independently of institutional influence.
Governments all across the world are evaluating the viability of CBDCs, demonstrating the prospect of switching to new forms of money and value storage. It shouldn’t be forgotten, though, that in democracies there are voters who are opposed to such plans and that there are valid arguments for why, if we are to explore new means of exchange, we should make the generational choice to forego CBDCs in favour of digital currencies that function independently of central banks.
In the upcoming years, there will probably be more discussion and advancement on these topics, but the reality is that, unlike bureaucrats, who move slowly, the bitcoin industry is a dynamic one that doesn’t wait for anyone’s approval.
The assertion made by Dalio that Bitcoin has “no relation to anything” stood out in his remarks. At first glance, it looks like a reasonable point of view, but it seems to ignore the new kinds of activity and commerce that cryptocurrencies are facilitating as well as the way people are beginning to think about them.
It is true that when we take a broad view of Bitcoin and the numerous other blockchains that have come after it, they frequently seem to be removed from the real world. However, this characteristic of the evolution of cryptocurrencies—its detachment—can have positive implications.
With DeFi, NFTs, and the token-fueled, rapidly expanding ecosystems that are emerging around blockchains like Ethereum, Cardano, and Cosmos, we find fully operational alternative markets and financial mechanisms that operate smoothly without first obtaining anyone’s consent and do so entirely in the digital sphere.
Additionally, they are very accessible to both users and developers in that, despite the fact that they need for some technical know-how, they are not gated or (at least for the time being) subject to onerous regulations. This implies that mistakes will be made and accepted, but it also implies that there is a huge window of opportunity for experimenting.
Being cut off from physical markets is not a drawback in this case; on the contrary, it enables quick development and gives the impression that what is being produced is ready to connect as the wider world continues its continual digital transformation.
Additionally, we must keep in mind that even though these networks are digital, their blockchain-based tokens are exchanged for traditional fiat money, and any gains or losses made are as tangible as the paper in a wallet.
When discussing cryptocurrency, it’s also important to keep in mind that it enables a new sort of transaction that involves not just material products and commodities but also cultural assets and even culture itself.
This type of observation may begin to sound a little abstract, but all that is needed to understand it is the understanding that culture is largely responsible for the creation and exchange of most of the content that is shared on social media and in other online venues, as well as for much of the global web traffic. That indicates that billions of individuals are connected through networks to share and amplify ideas, fashions, and social trends.
These elements of the web and of our cultural life become transferable through specific components of cryptocurrency, whether it be meme coins, NFTs relating to art and design, or tokens connecting together all types of communities, and new online markets develop.
Bitcoin Establishes a Basis
It’s important to consider why Dalio thinks Bitcoin receives “disproportionate attention” and what level of attention is reasonable. Owning Bitcoin is no longer an unusual concept for young retail traders joining the markets for the first time, and cryptocurrency does not appear to be an asset class that might just disappear.
Cryptocurrency is actually open for business 24 hours a day, 365 days a year, to anyone, anywhere, and it’s in a constant state of flux thanks to its decentralised nature and digital-only nature, all of which can make it a particularly alluring proposition, especially for those who are not invested in the conventions of traditional finance. And inside this emerging space, Bitcoin serves as the basic unit of exchange and serves as the basis around which all other currencies have been built.
If we assume that cryptocurrencies, their culture, and their products are here to stay and are likely to draw more programmers, traders, and users with each passing generation, it’s conceivable that Bitcoin will be perceived as having received disproportionately less attention than it actually merited.